A target benefit plan aims to provide a predefined retirement benefit (the "target benefit") with predefined contributions. Members’ target benefits may be adjusted upwards or downwards depending on the financial status of the plan. In this paper, it is argued that the unit credit cost method (projected or unprojected) traditionally applied to the funding of defined benefit plans in Canada is not an appropriate method for assessing the financial sustainability of target benefit plans. That assessment can be done through the means of an actuarial balance sheet, which takes into account future contributions to be made for, and benefits to be earned by, current and future plan members. The actuarial balance sheet developed in this paper is adapted from the actuarial balance sheet methodology that has been applied to the Swedish social security system since 2001.